LONDON: Sterling fell against the dollar and euro on Friday, retreating from the previous session’s one-month highs, as investors braced for Britain’s beginning the formal process of leaving the EU next week.
An interview with Bank of England (BoE) policymaker Gertjan Vlieghe in The Times also laid out the argument for the BoE looking through further rises in inflation over the next few months in aid of supporting the economy.
Strong inflation and retail sales data have added to expectations the BoE might lean toward supporting sterling with higher interest rates over the next year, pushing the pound 1 percent higher against the dollar this week.
But investors worry that Prime Minister Theresa May’s invoking Article 50 next Wednesday may trigger a period of political jousting with its EU partners that will lay bare the scale of the risks to the economy from 18 months of talks.
Sterling dipped 0.3 percent to $1.2484 in morning trade in London and was 0.4 percent lower at 86.47 pence per euro.
“Uncertainty (surrounding Brexit) remains intact,” said Credit Agricole currency strategist Manuel Oliveri.
“Rate expectations are unlikely to rise because the BoE is linking its monetary policy stance to this uncertainty, and that is why we do not believe sterling has more upside from current levels.”
Since minutes from the BoE’s meeting last week showed a number of monetary committee members close to voting for a rise in rates, signals from official have been mixed.
Asked about Tuesday’s inflation data, BoE Gov. Mark Carney said it was important not to overreact to a single data point.
Deputy Gov. Ben Broadbent on Thursday said it was possible interest rates would rise, but also highlighted a strong sense of caution among investors about the outlook for Britain after Brexit.
Policymaker Gertjan Vlieghe believes a rise in inflation to more than 3 percent might not prompt him to consider raising interest rates because the increase would probably be temporary, The Times newspaper reported on Friday.
Brexit risks, BoE pull sterling off highs
Brexit risks, BoE pull sterling off highs
School, hotel outlays keep Saudi POS weekly spending above $3bn: SAMA
RIYADH: Spending on education in Saudi Arabia increased by 4.3 percent for the week ending Jan. 10, while hotel outlays saw a 0.9 percent increase, aiding the total weekly spending to stay above $3 billion.
According to the latest data from the Saudi Central Bank, the overall point-of-sale value dropped 16.6 percent to SR14.2 billion ($3.79 billion) with transactions representing a 7.3 percent week-on-week decrease to 236.7 million.
This week saw negative changes across all the remaining sectors.
Spending in the freight transport, postal, and courier services sector saw the biggest decrease at 35.9 percent to SR47.60 million, followed by telecommunications, which posted a 26.2 percent drop to SR188.42 million.
Expenditure on apparel and clothing saw a fall of 19.3 percent to SR1.3 billion, followed by an 18.3 percent decrease in spending on books and stationery. Jewelry outlays saw a 22.3 percent decrease to reach SR422.54 million.
Spending on car rentals in Saudi Arabia fell by 14.2 percent, while airlines saw a 6.3 percent decrease to SR48.04 million.
Expenditure on food and beverages saw a 23.6 percent decrease to SR2.07 billion, claiming the largest share of the POS. Restaurants and cafes retained the second position despite a 7.3 percent dip to SR1.76 billion.
The Kingdom’s key urban centers mirrored the national decline. Riyadh, which accounted for the largest share of total POS spending, saw a 13.6 percent dip to SR4.85 billion, down from SR5.61 billion the previous week.
The number of transactions in the capital settled at 74.78 million, down 6.1 percent week on week.
In Jeddah, transaction values decreased by 9.5 percent to SR2.02 billion, while Dammam reported a 15 percent decrease to SR707.12 million.
POS data, tracked weekly by SAMA, provides an indicator of consumer spending trends and the ongoing growth of digital payments in the Kingdom.
The data also highlights the expanding reach of POS infrastructure, extending beyond major retail hubs to smaller cities and service sectors, supporting broader digital inclusion initiatives.
The growth of digital payment technologies aligns with Saudi Arabia’s Vision 2030 objectives, promoting electronic transactions and contributing to the Kingdom’s broader digital economy.
